This calculator shows New Zealand investors the long-term power of reinvesting dividends rather than taking them as cash, one of the most underappreciated drivers of investment growth. You enter your investment, expected dividend yield, and any share price growth, and the tool projects how reinvested dividends compound over time compared with spending them. It helps illustrate why total return matters more than price alone. The breakdown shows the value from price growth, the value from reinvested dividends, and the combined total year by year, making the compounding effect tangible and helping investors decide whether to switch on dividend reinvestment for their portfolio.
Reinvesting compounds dividends as if buying more shares each year. The cash option grows only by price, with dividends taken out and added separately without compounding. Figures are before tax, and returns are not guaranteed. Estimate only, not financial advice.
When dividends are reinvested, your whole investment grows at the combined rate of price growth plus dividend yield, compounding each year. When dividends are taken as cash, only the share price grows in a compounding way, while the dividends are received and set aside without earning further returns. The calculator projects both so you can see the gap, which widens dramatically over long periods thanks to compounding.
A $20,000 investment with a 4% dividend yield and 4% price growth over 25 years grows to around $68,000 with dividends reinvested, since it compounds at about 8% a year. Taking the dividends as cash leaves the shares worth about $53,000 plus the dividends received, a noticeably lower total once compounding is lost.
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